Protect Your Brand, Customers and Reputation. It’s All You Have

In a tough economy, everyone is looking for ways to increase revenue. Organizations are making tough choices, customers are making tougher choices, and your people are doing everything they can to keep things moving forward.

This represents one of the most dangerous times for any business.

The tendency to do anything to increase revenue is tempting. But these short-term fixes can irreparably destroy the trust your customers, employees and peers have in your brand.

So how do you know if you are going too far?

Easy, ask your customers and your employees.  Marketing research is the only way to know what you’re your customers and employees are willing to accept.

Trust is built on two-way communication. It's about listening. To build trust, you have to clearly understand what your customers want and need from you and how they will react to new offerings or to changes in existing offerings.

Companies that listen to consumers, employees, and stakeholders will continue to produce excellent goods and services that will not compromise the quality and value that they expect from your brand.

Those who don’t listen are risking the one thing that will get them through the recession, their customers.

Ignore Your Customer (or Voters) At Your Own Peril

Marketers who have been around the block know that business interests often trump consumer needs. Yes, shocking. Who knew that businesses would expect customers to conform to their processes rather than creating products and services that fit the customer’s needs?

While there are many frustrations for market researchers, one particularly bothersome item that occasionally arises is hearing executives say that they need to educate their customers on why their (insert product or service here) is better than the requested needs of the consumer. Yes, we know better and we will be successful if we can just improve our communications. We don’t have a product problem, it is a communications problem. Ignore the research. Our customers don’t know what they want and we have to tell them what they need.

The current healthcare debate is a great case study of this problem. Instead of providing a solution that most Americans would find of interest, the current proponents of the plan are trying to convince a larger number of Americans that they know better and their way is the only solution.

On the other side of the fence, health insurance companies have consistently failed over the years to take care of their customers, and they’ve created processes only an actuary could love. Insurance companies deserve to be forced into change. If they had made changes and innovated along the way, consumers would not be demanding reform.

With these two sides failing to listen to their customers/constituents...is it any wonder that people are fervently protesting?

What should be worrying the proponents of healthcare reform are not the people protesting the plan, it is the silent consumers/voters watching and complaining quietly. For every customer who calls to complain, there is a far larger number who do not call and will defect at the first opportunity.

There is not a communications plan or strategy that can successfully force consumers into a program they don’t want. The consumer or voter will always win out in the end with their wallets or their votes. He who ignores his customers/voters, does so at their own peril.

What Comes Around..

Nestlé USA is taking aim at Muscle Milk, filing a complaint with the National Advertising Division of the Council of Better Business Bureaus that has since been referred to the Federal Trade Commission and the Food and Drug Administration, as well as filing a petition to revoke the brand's trademark. Nestlé says that CytoSport's Muscle Milk name is "deceptively misdescriptive" because the beverage contains no milk. The New York Times

Muscle Milk has been quite litigious over the years. They’ve sued in the past to block others from using variations of milk, opposing trademark applications for products including Mega Milk, Active Milk Shake Plus and Monster Milk.

So why is Nestle going after a sports drink company? Apparently Nesquik is promoting itself as a sports drink: after a 2006 study partly funded by the dairy industry found that chocolate milk helped in replenishing the body after workouts.

I don’t think I would be going out on a limb to say that that the previous targets of CytoSport’s attorneys are cheering Nestlé on as they challenge CytoSport’s trademark on Muscle Milk. I’m all for protecting your brand, but when you go overboard, karma is going to bite you back at some point. Looks like CytoSport is finally getting a dose of their own medicine.

Walmart A Green Brand? Seriously?

Here are the 10 greenest brands according to the 2009 Global Brands Survey.

Top 10 Greenest U.S. Brands

1. Green Works (Clorox)

2. Burt's Bees

3. Tom's of Maine

4. SC Johnson

5. Toyota

6. Procter & Gamble

7. Walmart

8. Ikea

9. Disney

10. Dove

Source: "2009 Global Green Brands Survey" conducted by WPP agencies Landor Associates, Cohn & Wolfe, and Penn, Schoen & Berland and independent consulting firm Esty Environmental Partners.

Tom’s of Maine, Burt’s, and Green Works are expected. But Wallly World? Did not see that one coming.

Back in 2005, CEO Lee Scott surprised everyone by embracing sustainability in a speech announcing ambitious initiatives on "all the issues that we've been dealing with historically from a defensive posture." Since then, Walmart has implemented an aggressive sustainability strategy, much of it employee led. Just last week, they unveiled plans to measure the sustainability of every product they sell.

The cynic would see this as a shameful PR attempt to blunt their constant negative press and to box in their critics. Whatever the motivation, it is amazing how far they have pushed this and how much they have accomplished in the past three years.

Drink Less? No. Just Drink Cheaper

Back in April, YouGovPolimetrix' Brand Index released a report indicating that four brands - Coors' Keystone, A-B/InBev's Busch, Miller Brewing Co.'s Milwaukee's Best and Icehouse - are so besmirched that the breweries should consider retiring them.

Now this from the The Wall Street Journal:

At a cost about $5 less per case than flagship brands such as Bud Light or Miller Lite, beer companies such as Anheuser-Busch InBev and MillerCoors are surviving the downturn thanks to rising sales of lower-cost beers, including Busch and Keystone Light.

Great quote from the story indicating why these brands are doing well.

Gillian Singletary, 24, of Los Angeles, has been buying more Pabst Blue Ribbon and Miller High Life and less Stella Artois and Pete's Wicked Ale. She said Blue Ribbon is seen as hip - in a retro way - at some L.A. bars.

"Drinking less doesn't really seem like the best option, so finding the cheapest way to drink is definitely one of my goals," said Ms. Singletary, a free-lance writer and executive assistant in the health-care industry.

I love this quote. It is a great illustration of the types of choices consumers use in making a purchasing decision. For this consumer, reducing consumption was not a viable choice. Selecting a less expensive alternative was the chosen path and with a stable of offerings at different price points, Busch and InBev are holding some of the business.

Not every brand will do well at every point in the business cycle. It is very important to remember the context of the economy and markets when analyzing research results and stated consumer choices. Otherwise, you might just kill off the product that would be your leading seller when the economy is down.

A Confidence Deficit

A lack of confidence in the economy and institutions is a recurring theme throughout most recessions. This one is no different. However, the depth and scope of the drop during this recession may be greater and deeper than most of the previous downturns. Check out these recent survey findings:

• 57.6% of Americans say they don’t have a voice anymore and too much is being dictated out of Washington, according to the April American Pulse^TM (N=4023). On the other hand, a quarter of participants (27.2%) say their voice is being heard, while 15.1% aren’t sure.
• Gallup’s daily tracking surveys from April 6-19, show that one of the casualties of the ongoing financial crisis is the amount of confidence Americans have in U.S. banks. With only 5% expressing "a great deal" of confidence and 13% "quite a lot" of confidence, Americans' confidence in banking has now fallen to its lowest level since Gallup began asking about the subject in April 1979.
• According to The Conference Board, Consumer Confidence was relatively unchanged in March, after reaching an all-time low in February (Index began in 1967).
• Workers who say they are very confident about having enough money for a comfortable retirement this year hit the lowest level in 2009 (13 percent) since the EBRI Retirement Confidence Survey started asking the question in 1993, continuing a two-year decline. Retirees also posted a new low in confidence about having a financially secure retirement, with only 20 percent now saying they are very confident (down from 41 percent in 2007).
• Earlier this week, Gallup released data showing that most Americans still view big government as a more serious threat to the nation than big business or big labor. Gallup has asked the question periodically since 1965 and government has always been seen as the biggest threat. In addition, Rasmussen Reports released data this week showing that 70% of U.S. voters believe that big business and big government generally work together against the interests of investors and consumers. Just 14% disagree with the assessment, and 17% are not sure.

Faith and confidence in businesses and institutions is low. Very low.

It has never been more important to make sure you brand is delivering on your promises and maintaining the confidence of your customers. There is just too much mistrust in the market right now.

Providing great service, being authentic, talking with and not to your customers and keeping your promise is absolutely vital.

Measuring and monitoring your customers attitudes about your products and services should be part of everyone’s retention and survival program.

The economy is beginning to improve and keeping a focus on these items will not only instill confidence in your customers, it will keep your brand alive during the recession and into the recovery.

What Marketers Need To Buy Before the Economy Improves

Earlier this month, Forbes put out a list of ten things to buy right now (assuming you have the cash) before the economy improves. Deals can be had for most of these items and the deals will probably evaporate later in the year. Here’s the Forbes list:

1. Car
2. A Vacation
3. High-Dividend Stocks
4. Laptop
5. Television
6. Toys
7. Diamonds
8. Women’s Clothing
9. Furniture
10. House

From a marketing standpoint, what items should we be focusing on before the economy improves? Granted, all of these items are dependent on the health of your organization and company budgets. If you are in the right position, here are a few things to think about.

First, advertising deals are available. Those with the budget should lock in avails now. New or renegotiated office space should be on the list since prices are depressed and availability is plentiful. Plus, creating a workspace that reflects your brand, your organization and who you want to be when the economy turns is now within reach.

Technology should also be on the list. Typically, tech leads early in most recoveries and the deals will dissipate quickly. Right now deals can be had plus you have the opportunity to get a leg up on the competition by improving your current processes.

Buy the competition. Oracle snapped up Sun, keeping them from IBM. Oracle will be creating efficiencies at Sun while the economy is improving which should be very helpful to their balance sheet. Why not take a look at buying up the competition? If they are not as healthy, this might be the time to talk.

Go see your customers. Travel is cheap. Why not go now when others are avoiding travel and when the prices are reasonable?

Of all of these, the last one is the most important. Go talk with your clients and see where they are headed and see how you can be part of their growth story. Remember, their recovery is your recovery.

The Perils of a Celebrity Spokesperson

Entrepreneur Magazine offers up a listing of tips to smaller businesses and startups interested in employing a celebrity spokesperson. The article’s advice for companies looking to boost their visibility offers more than a dozen tips on finding the right celebrity endorsement. Here are some of the more important takeaways:

• Define expectations, budget and time frame
• Be sure values, ethics and personalities jibe
• Don't settle for just any celebrity
• Evaluate with your head, not your heart
• When shooting for the stars, aim high
• For businesses whose market is strictly local, think local celebrity
• Look for someone with charisma
• Find someone willing to go beyond the call of duty because he or she has genuine interest in your product/brand
• Weigh whether to hire an outside firm to help in the search
• Know the risks-—and have an exit strategy

That last item is the most important. While the article spends a lot of time talking about the positive aspects of a celebrity spokesperson, it also brings a lot of risk.

When you employ a spokesperson, you are aligning your brand and organization with the face of a single individual. This can be very successful for all types of organizations. Wendy’s had a great run with Dave Thomas, Priceline has done very well with William Shatner and George Foreman made the Foreman Grill a success.

However, trouble for a spokesperson generally means trouble for the business or brand. Despite the familiarity and appeal of a celebrity (often calculated by us researchers as a Q-Score), their troubles are now your troubles.

Here’s a great example. Many years ago, a mid-sized southern regional bank tried to position themselves as friendly and caring about their customers. The campaign included the tag line “Where banking is still a people business.” It was great campaign that made the CEO the face of the organization. The CEO was the epitome of a bank CEO, tall, gray hair, and always wearing a blue suit. The CEO was included in local commercials dismissing the importance of technology and automation, always closing with the tag, “Banking is a people business!”

The organization spent a lot on the campaign and on customer service and measuring customer satisfaction. The entire organization was focused on customer service and customer surveys.

Just one problem. Profitability. The organization did a great job of focusing on the customer and developing the campaign, but they also made a lot of bad loans and lost sight of risk and profitability.

As you might guess, the CEO was removed and the spokesperson of the campaign disappeared. All of the investments that made the CEO the face of an organization focused on satisfying the customer was history, and so was the successful campaign.

Having a celebrity spokesperson ties your brand to that person. Everyone has ups and downs and their success or failure now become your worry. It can make a small company, just ask George Foreman, or it can be a complete headache. Whatever you do, it should never be done lightly and without some thought. I also would suggest not using a CEO. Being able to distance yourself from a celebrity is much easier than distancing yourself from your CEO or former CEO.

Focus On Value And The Influencers Will Follow

Ed Keller, who co-authored the book THE INFLUENTIALS, answered some of the recent criticism of the concepts popularized by his book on Media Post’s Marketing Daily today. Based on decades of research through the Roper Polls, Keller’s book and his work at RoperASW, along with Malcolm Gladwell’s THE TIPPING POINT, popularized the concept of a small number of Americans (say 10%) determining how the rest consume and live by chatting about their likes and dislikes.

The concept of influencers was not a new one at the time Keller’s book was published. A hundred years after John Stuart Mill penned these words on opinion leaders, research began to empirically prove the concept:

The mass do not now take their opinions from dignitaries in Church or State, from ostensible leaders, or from books. Their thinking is done for them by men much like themselves, addressing or speaking in the name, on the spur of the moment...

-John Stuart Mill, ON LIBERTY

In short, Keller tries to refute Guy Kawasaki’s October blog post that declared: "Reliance on influentials is flawed because the Internet has flattened and democratized information..." maintaining that "it's better to have an army of committed nobodies than a few drive-by somebodies."

I think Kawasaki, like Mill, is correct. Yes, I just paired Kawasaki and John Stuart Mill. Everyone is influenced by their 10%, which differs from group to group, a point Keller acknowledges. As Kawasaki points out, social media has flattened how information flows. I think using a traditional top down approach is becoming less effective and I don’t think Keller would dispute that statement.

To me, it is pretty simple. Consumers respond to a quality product, a compelling story and are apt to tell others about their positive experience.

It always comes back to the perceived value of the product and how you communicate that value. The online tools available to spread that message, both positively and negatively, are now flatter and faster than ever before and the access to people and influences has never been greater.

As David Oligivy pointed out many years ago,

The consumer isn't a moron; she is your wife. You insult her intelligence if you assume that a mere slogan and a few vapid adjectives will persuade her to buy anything. She wants all the information you can give her.

It does not matter how many bloggers, followers, friends, media personalities, or perceived influencers you have promoting your product if there is no value. Creating a needed product or service, testing it to ensure it fulfills those needs, and communicating value are the three keys to success that everyone should focus on despite the available technologies to communicate the message.

Fixing Detroit (The Big 3’s Real Problem)

Professor Byron Sharp of the University of South Australia, writing in this month’s Market Research Magazine from the AMA, makes an excellent point about the plight of the Big 3 us automakers.

In the US, customer loyalty rates for all manufactures including the Big 3 is in the 40% to 60% range. For the major domestic and foreign automakers, loyalty rates have remained pretty constant over the past few years at about 50%.

As Professor Sharp points out, the real problem for the Big 3 is acquisition, not loyalty. The lack of acquisition among new car buyers is eroding the market share of the domestic producers. For new auto buyers, the Big 3 are increasingly not considered an option and this is where Toyota, Honda and Nissan are stealing market share.

Customer loyalty and retention is important for all organizations and Targoz Strategic Marketing is skilled at helping organizations understand why customers are loyal and who is at risk.

Truly understanding why customers are loyal to your product or service is exceptionally important to maintaining a healthy brand and organization.

However, loyalty and retention is not a substitute for new business sales. Customer loyalty and retention only brings stability to organizations and creates a foundation for growth. Customer acquisition is the real key to brand growth and this is where Detroit needs to focus its energies.